3Yr Market - 4.5% Showing on both sides?

It certainly used to be the case that the "behind-the-scenes" matching process operated to 2 decimals of %, whereas the rates on the marketplace were only shown to 1 decimal of %.

As I understand it, borrowers and lenders would each see the rate that applies to them - so for a lender it's the return after all fees, and for the borrower it's the APR inclusive of all fees... so 4.5% to a lender might translate to (say) 10.32% for a borrower. If the borrower asks for 10.3% instead, the system would effectively translate that to a request at 4.48%, which also displays as 4.5%.

Thanks for the response.

That scenario did cross my mind too, however, if true, it wouldnt explain the earlier situation of outstanding lender requests at 4.3% and 4.4%. Unless theres some further drilling down into the decimal places aspect that is required?

My first thought was that I must be looking at and "old" version of the page, ie, a browser problem but that appears to be fine everywhere else and I tried it on two devices - the same info appeared on both.

Could the fact that it was a sizable (especially for the 3Yr market) order have some weird consequence too?

The point I was trying to make, but perhaps did not make clearly enough, is that although borrower rates are expressed to 2dp the set of rates available to borrowers is not all possible 2dp rates. There is a SINGLE borrower rate that corresponds to each 1 dp offered rate, and these are the only borrower rates that exist. Or so I have observed based on the entire population of my matched offers. An offer of (say) 5.8% corresponds to EXACTLY the same borrower rate on every day that I have offered at that rate, and this 1:1 relationship is true for EVERY rate at which I have bid. It's also true regardless of how long my money was on offer (anything from minutes to several days).

This statement is not based on a 100% sample (that would be too boring) but it is based on a fairly random sample of over 50 matched bids, checking back to the loan documentation in each case.

sl75
The interest rate that I am referring to as the borrower rate is the actual interest rate to 2dp as shown in the contract.

If you go to your money on loan you will see a list of contracts. Click on "view" for any one of those contracts and it will take you to a "loan contract details" page. Click on "view" against "contract document" and this will enable you to open or save a pdf of the contract. The contract has a 2dp interest rate at the top. Note that this is separate from the credit fee agreed between RS and the borrower.

As i said in one of my earlier linked posts, for contracts entered into since RS stopped charging lender fees, my experience based on a sample of my loan book, originated on a range of different dates is that:

all of the 5.9% loans have a contract rate of 5.75%, which is the minimum rate needed to round down, after compounding, to 5.9%.
all of the 6.0% loans have a contract rate of 5.85%, which is the minimum rate needed to round down, after compounding, to 6.0%.

The same is true for different rates. All of the loans that I have looked at have the minimum rate needed to round down, after compounding, to a specified single dp rate. This is what I would have expected. There is no good reason for the loans ever to have an intermediate rate.

This relationship also holds true for older loans where there is a 10% lender fee, if it is deducted before compounding.

All that said, I take your point that the 1:1 relationship might not apply where lenders match an existing borrower bid. But any departure from the 1:1 relationship would introduce inefficiency in the market because some borrowers would be paying more than is required to give lenders their stated 1dp rate. Either that or some lenders would be receiving less than their stated rate, which I hope very much is not the case!

In the interest of science I have just matched a small amount against an existing borrower bid of 5.6% in the 5 year market. It was snapped up immediately. When the loan has been formed I will look at the contract and report back.

sl75 I'm not a borrower so I'm not sure if their site works exactly the same way. However, if they are specifying annualised rates to 1 dp I think they should in principle correspond to the same limited set of 2 dp rates that I have observed in my contracts and thus to the same set of annualised 1 dp rates that we bid as lenders, with no rounding differences whatsoever. A difference would, IMO, be indicative of a programming error, which is what I think happened the last time there was an anomaly. Probably someody who did not do the original coding rounding something to the wrong number of decimal places.

It's just occured to me that if that is the problem my "scientific" test is unlikely to show it up. I may have cost myself 10p (if the contract runs to term) in vain! Let's wait and see what the contract says anyway...

That won't usually be the case.

A lender's annualised rate is net of all fees, and a borrower's annualised rate includes all fees (one of which is the borrower's personalised "credit rate" payment, so different borrowers should see the same market as though it has very different numbers - different both to what lenders see and to what each other see). It would be unlikely for both to be "nice round numbers" to 1 d.p. at the same time.

I did try the first step of an application recently. I was quoted an APR of 11.1% from the initial check, which wasn't worth it for my purposes at the moment (I'll just draw down from P2P accounts, and if necessary use Zopa's Rapid Return), so didn't bother proceeding further (thereby wasting RateSetter staff time for any further checks they'd do in order to approve me to borrow at a rate I wasn't interested in borrowing at anyway). If my requirement had been more urgent, or I'd otherwise decided to take it further, I might have been given the opportunity to attempt to interact with the marketplace (I didn't, so still have no idea exactly what user interface or interactions they have for the borrower-side of the marketplace) - I might have tried for an APR of 9.9% (to get below the psychological 10% barrier), in which case lenders would have seen a demand at a rate something in the region of 1% lower than the prevailing market rate... but being calculated from MY request for 9.9% APR, it would be unlikely to be exactly correspond with the relevant round number in terms of lender return.

sl75 I now have the result of my test too and you are right.

I matched a borrower request that was displaying at 5.6% in the 5 year market and it has come back with a contract rate of 5.54%, which corresponds to an annualised rate of (1+5.54%/12)^12-1 = 5.683% whereas if the borrower had matched a lender request at 5.6% the contract rate would have been 5.47% (being the smallest 2dp rate that compounds to over 5.6%).

It's disappointing to be proved wrong but the good news is the test should end up costing me about 3p less than I expected!